Strength in both athletic footwear and apparel, coupled with solid growth in the hunting category, has been boosting sales, we believe . . . Moreover, we believe Q4 sets up well as the company looks to have embedded a healthy degree of weather-related conservatism into the implied Q4 guidance.

We believe our comp estimate of 6% could prove conservative by 200-300bps as basketball (~40% of sales) continues to surge, helped in large part by Nike’s product launch calendar that has delivered no fewer than 46 new

releases during FL’s fiscal Q3 at an ASP of $165. That said, we believe both running and European comps will be flattish as running faces ASP headwinds despite unit growth, and macro pressures in Europe are capping the region’s growth potential.

Like FL and DKS, HIBB should benefit from comparable category strength in basketball and running. That said, we do not see much comp upside to our 6% estimate due to the slower start to BTS. As for gross margin, we are not anticipating significant expansion (+18bps vs. +110bps in Q2) given the BTS promotion that was pushed into Q3 from Q2.